The Tyler Group News Blog Reviews - China factory PMI - Doubts against economy’s strength

7/30/2019 The Tyler Group News Blog Reviews - China factory PMI - Doubts against economys strength

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The Tyler Group

News Blog Reviews:

China factory PMI:

Doubts against

economys strength

http://domestic.tylergroupservices.net/blog/chi

na-factory-pmi-doubts-against-economys-

strength/

7/30/2019 The Tyler Group News Blog Reviews - China factory PMI - Doubts against economys strength

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7/30/2019 The Tyler Group News Blog Reviews - China factory PMI - Doubts against economys strength

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Without warning, this April, growth in Chinasmanufacturing sector unexpectedly slowedbecause new export orders drop. This causesrise in doubts towards the strength of theeconomy after a disappointing first quarter.While analysts had expected the April PMI tobe 51.0 it the official purchasing managersindex (PMI)fell to 50.6 in April from an 11-month high in March of 50.9.

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A comparable turn down in a preliminary HSBCPMI in the previous week reflected the recoilon the official PMI, signifying Chinas exportsengine is encountering an opposite from theeuro zone recession and slow-moving growth inthe United States.Analysts said it will provide support for theeconomy in the second quarter if Chinas newgovernment has signaled it will step upinfrastructure investment.Overall, my general feel is that China isgrowing but slower than people expected say amonth ago, said Alvin Pontoh, economist atTDSecurities in Singapore.

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But I dont think this is reason for alarmthis is probably what the new administrationis looking for. Structurally, China cannot growat 9 or 10 percent any more, so over thenext few years, youd reasonably expectgrowth to edge lower to say 7 percent orso.A sequence of global data, one of which waslower than projected U.S. economic growthfigures, has spoiled hopefulness perceived atthe beginning of the year that the worldeconomy was getting better.

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Many countries in Asia and Europe marked May1 as Labor Day Holiday thus making marketreaction to the PMI unnoticed and hushed.While Chinas markets are still closed and willreopen on Thursday.Standard three-month copper fell and weighedon mining stocks in Australia following the PMIfigures. But on the other hand, Australian andNew Zealand dollars held their ground.

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From March with 52.3, new orders sub-indexfell to 51.7 in April; this is according to theofficial PMI figures, holding above 50 whichseparate expansion from contraction comparedwith a month earlier. Nevertheless, suggestingthey were shrinking is the new export ordersindex fell to 48.6 from 50.9 in March.The lowest in at least four years is the inputprice sub index fell to 40.1 in April.

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The dip in April PMI shows that the foundationfor Chinas economic recovery is still not solid,Zhang Liqun, an economist at the DevelopmentResearch Centre, a top government think tank inBeijing, said in an emailed statementaccompanying the index.All these show the possibility for Chinasgrowth to slow slightly in the future. We mustwork to stabilize domestic demand and make oureconomic recovery more sustainable, he said.From 51.6 in March it fell to 50.5 this April asper HSBCs preliminary PMI since new exportorders shrank. On Thursday the final reading isscheduled to be published.